Cash Back vs Low Interest Calculator
Dealers love offering a choice: $1,000–$3,000 cash back with normal financing, or teaser-rate financing with no rebate. The right answer depends on price, rates, and term — run both deals here before deciding.
Your results
Charts & visualization
Total cost by offer
The rebate shrinks what you finance; the teaser rate shrinks what interest accrues. Only one usually wins.
Every chart’s underlying numbers are available as text — use the “view as table” control under each chart.
How it works
The calculator prices both paths precisely:
- Rebate path — subtracts the rebate from the price, then amortizes that smaller balance at the standard APR.
- Teaser path — finances the full price at the promotional APR.
It compares total paid over the entire term, not monthly payments — a lower payment can still hide a more expensive loan. Shorter terms generally favor taking the rebate; longer terms favor the low rate because more months accrue interest.
Formula used
P— vehicle priceR— cash rebaterStd / rLow— standard and promotional APRsn— term in months
Example calculation
Taking the $2,000 rebate means financing $33,000 at 7.9% — about $668 per month and $40,053 in total. The 2.9% teaser finances all $35,000 for about $627 per month and $37,641 overall. On these numbers the winner is the low APR offer, saving roughly $2,412. Change the term to 36 months and the rebate path wins by even more.
Assumptions & limitations
- Both offers assume the same negotiated vehicle price.
- The full rebate is applied to the down payment (reducing amount financed).
- Both loans are held for the complete term at the stated APR.
- Taxes, fees, and state-specific rebate taxation (some states tax the pre-rebate price) are excluded.
Results are planning estimates based on your inputs and the stated assumptions — not financial advice or a loan offer. Verify important figures with your lender or advisor.
Frequently asked questions
Should I take the rebate or the low APR?
It depends mostly on term length and the rate gap. Long terms amplify the value of cheap money; short terms make the upfront rebate relatively stronger. Run your exact numbers — the difference is often $500–$1,500.
Can I combine the rebate with outside financing?
Often yes. Manufacturer rebates typically apply regardless of lender, while the teaser rate requires using captive financing. Getting pre-approved elsewhere gives you a benchmark APR for comparison.
Are rebates taxable?
In many states sales tax is computed on the price before the rebate, which slightly reduces its effective value. Check your state’s rule if the amounts are large.
Does paying off early change the answer?
Usually yes, in the rebate’s favor. Simple-interest loans accrue interest on the balance, so paying either loan off early shrinks the teaser rate’s advantage less than you might think — rerun the math with your realistic payoff date.